February 14, 2011

Preschool Program Produces Payoff

Photo of a young African-American man looking at a computer and smiling

An early education program for children from low-income families generates an estimated $4 to $11 of economic benefits over a child's lifetime for every dollar spent on the program, according to a new analysis.

The Child-Parent Centers (CPC) program in the Chicago Public School System provides intensive instruction in reading and math from pre-kindergarten through third grade, combined with frequent educational field trips. The children's parents receive job skills training, parenting skills training, educational classes and social services. They volunteer in their children's classrooms, help with field trips and attend parenting support groups.

A previous analysis found that children who had been enrolled in CPCs were more likely to go to college, get a full-time job and have health insurance. They were also less likely to go to prison and suffer from depressive symptoms. A team led by Dr. Arthur J. Reynolds and Dr. Judy A. Temple of the University of Minnesota, Minneapolis, set out to do a cost-benefit analysis of the program. Their study was funded by NIH's Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD).

The researchers examined records for more than 1,500 children, 93% of whom were African-American and 7% Hispanic. Nearly 1,000 children started attending a CPC at age 3 or 4. The comparison children either attended another program or didn’t go to preschool. The team surveyed the children and their parents, and analyzed education, employment, criminal justice and child welfare records for the children through age 26.

The researchers projected lifetime earnings based on education levels and juvenile crime, and estimated the sum of taxes paid on these earnings. They also added the value of funds that weren't spent for remedial education for students held back a grade; the cost of poor health, injury or treatment for depression; and costs for child welfare services or interaction with the judicial system. From these gains and savings, the researchers subtracted the cost of implementing the program.

In the January-February 2011 issue of Child Development, they reported that children who joined the program earliest showed the greatest benefits. Those enrolled in preschool CPC received net benefits at age 26 totaling $83,708 per participant in 2007 dollars, compared with children who didn't take part in the program. When projected over a lifetime, the economic benefits of the program, both to participants and society at large, amounted to nearly $11 for dollar spent — an 18% annual rate of return on the original investment. Even for children enrolled in CPC for the shortest amount of time — beginning in first or second grade — lifetime benefits were about $4 for every dollar spent, a 10% annual return on the initial investment.

Because the study didn't assign children randomly, it doesn't conclusively prove that the CPC program caused the gains observed in its graduates. However, these results strongly suggest that the program produces lasting economic benefits.

"Children who were enrolled in the CPC program clearly demonstrated a significant return on the initial investment," Reynolds says. "These benefits appear to be derived from early gains made in the CPC program on school readiness, achievement, and parental involvement in the children’s schooling."

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